(K)risis or (K)erfuffle?

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Amid the endless grandstanding on Capitol Hill regarding those toxic AIG bonus checks, Congress did find time over the past few weeks to address another financial crisis: the collective state of the nation's 401(k) accounts.

"Address" may be putting it too strongly. "Hear about" is more accurate, as everyone from labor unions to investment firms appeared before various House and Senate committees that may or may not do something about the massive collective hit that American workers' retirement accounts have suffered. As with health-care and banking reform, proposals run the gamut from full-on nationalization to an enthusiastic endorsement of the status quo.

Ironically, in many ways both the scope of the losses and the relative stoicism with which workers have borne them speak to a certain success of the 401(k) plan. For years companies have cajoled workers to join such plans and, once in, to have no fear of stocks. The trillions of dollars' worth of losses certainly suggest that a substantial percentage of workers finally got the message, perhaps to their chagrin.

But there is good news: while there has been a marked flight to safer investment options, the number of workers suspending contributions, taking hardship withdrawals, or closing out accounts altogether is surprisingly small, particularly given the huge numbers that have been laid off and face foreclosure or a similar financial catastrophe. The message to think long-term has apparently been heard as well. As a result, the inflated rhetoric of would-be reformers, which seemed set to carry the day in January, is now deflating nearly as fast as workers' account balances.

Even if reforms are mild, however, companies face plenty of headaches. In addition to potential lawsuits, they must decide whether and when to restore matching contributions, how to modify the messaging and education they build around defined-contribution plans, and what to do about workers who may not be able to retire until many years past the date that they and their employers had anticipated. On the bright side, the baby-boom brain drain can now be crossed off your list of worries.

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